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Sector Snapshot: IT in China Expected to Grow 16% Over 5 Years

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China's IT services segment has been the fastest growing in all of the IT industry. (Image: Ilker)
China's IT services segment has been the fastest growing in all of the IT industry. (Image: Ilker)

BUSINESS

  • Chinese software market expected to grow 14% in five years
  • Software to be worth $13.1 billion in 2011
  • Computer hardware sales projected to reach $70 billion in 2011 and $118 billion by 2015

The information technology sector is being used to promote growth in less-developed rural areas of China. Private research firm Business Monitor International is predicting roughly 16% growth in IT services for the 2011-2015 period. Small and medium-sized businesses are expected to become the fastest growing PC market segment.

Increases in consumer spending, growing interest in cloud computing, and the modernization of health care, manufacturing, and education sectors will also promote growth over the next five years. A boost in electronic products, especially desktops and laptops, is to be expected due to the interest in expanding networks to rural regions of the country; a 50% increase in import tariffs on electronic goods will boost multinational dealers. Overall, China's IT sector is expected to continue to outperform the global competition.

Sector Statistics - China Information Technology (source: Business Monitor International)

  • China's IT services segment has been the fastest growing in all of the IT industry. Currently, projections have been estimated at around 16% of overall IT segment growth between 2011 and 2015.
  • Chinese software market, which is expected to grow 14% in five years, will reach $13.1 billion in 2011 alone. That figure is up from $11 billion in the previous year.
  • Computer hardware will grow 14% as well due to rural-driven growth. Hardware sales are projected to reach $70 billion this year and $118 billion by 2015.
  • Chinese officials introduced a 50% import tariff on electronic goods. In a move to comply with the demands of the WTO, the Ministry of Finance reduced the tariff from 20% to 10% in late January.

Latest Industry News

  • TPI, the largest global data and advisory firm, and Devott, a well-reknown Chinese consulting and research company, announced a partnership program on May 16, 2011, that will attract more service providers and buyers to China.
  • China Information Technology has accepted a contract with the local government worth $3.3 million to provide geographical information systems and PDA handsets to the Shenzhen Traffic Police.
  • The e-commerce site Groupon entered the Chinese market in March in search of new deals despite the tight competition.

Key Players

  • Microsoft, who in the first year of their latest released operating system, Windows 7, tripled their sales when compared to previous first year releases.
  • Lenovo has been the market leader in their home country. Lenovo has begun using cloud computing and is targeting the business segment.
  • HP is currently rebuilding distribution channels in hopes of regaining their footing as China's second-place market leader. Both HP and Lenovo are investing heavily into expanding their networks to the growing rural regions.
  • Dell has also announced that it plans on targeting the business segment and cloud computing strategy.

Upcoming Events

  • On May 21 and 22, 2011 the International Conference on Network and Computational Intelligence (INCI 2011) will be held in Zhengzhou, China.
  • The 2011 IEEE International Conference on Information Management and Engineering will be held in Zhengzhou, China on May 21 and 22, 2011.
  • The 2011 International Conference on Computer Technology and Science (ICCTS 2011) Workshop will be held in Dalian, China on August 26 and 27, 2011.

By Nicole Manuel for
Nicole Manuel is a freelance economics, finance and blog writer with a degree in economics and over two years of experience.

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